Intesa Sanpaolo, UniCredit, KKR, Sign MoU to Unload Bad Loans

By Giada Zampano

ROME--Italy's two largest banks, Intesa Sanpaolo SpA (ISP.MI) and UniCredit SpA (UCG.MI), on Tuesday announced they have signed a memorandum of understanding with U.S. private-equity firm Kohlberg Kravis Roberts & Co. that would allow the two lenders to unload some of their restructured loans.

The agreememt, which also involves restructuring service adviser Alvares and Marsal, aimed to "jointly develop and implement an innovative solution to optimize the performance and maximize the value of a selected corporate loan portfolio under restructuring through proactive management and additional funding at the asset level," the banks said in a joint statement.

They added that talks on the partnership are ongoing and that further details will be disclosed as progress is made.

Last month, Intesa Sanpaolo posted a huge fourth-quarter loss, hit by large write-downs on bad loans and the value of past acquisitions. Italian banks are cleaning up their balance sheets ahead of a check-up on the euro zone's largest lenders.

Intesa's results followed similar decisions by its Italian peer UniCredit and underscore how, under pressure from regulators, Italian banks opted to cut down the value of their assets to more realistic amounts as the European Central Bank carries out a review of the most important euro-zone lenders, before it takes over their supervision toward the end of this year.

Write to Giada Zampano at [e-mail]

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